10 Things You Need To Know This Morning

Customs officers look at
confiscated counterfeit FIFA World Cup replica trophies in Yiwu,
Zhejiang province April 16, 2014. The local customs office seized
a total of 1,020 unauthorized FIFA World Cup replica trophies
before they were shipped out to Libya, local media
reported.REUTERS/Stringer

Good morning. Here's what you need to know.

Markets down a little. Markets are fairly
subdued ahead of the Easter holiday. U.S. stock futures point to
a slightly negative open, while U.S. Treasury note futures are
poised to open slightly positive. The U.S. dollar is down a bit
against the Japanese yen, and moreso against the euro. European
equity indices are in the red, with Italy's FTSE MIB and Spain's
IBEX 35 down the most, both currently 0.4% below Wednesday's
closing levels.

Morgan Stanley earnings. Morgan Stanley reported
adjusted earnings of $0.68 per share in the quarter ended March
31, above analysts' consensus estimate of $0.60. Revenues were
$8.8 billion, above the consensus $8.57 billion estimate. Revenue
increased year over year in its three main business segments —
institutional securities, wealth management, and investment
management. "We are pleased that this year we will commence
a further share repurchase of up to $1 billion and double our
dividend," said James Gorman, the bank's chairman and CEO, in a
press release.

Goldman Sachs earnings. The Goldman Sachs
Group also announces quarterly financial results this morning
before the opening bell. Analysts expect the investment bank to
report earnings of $3.45 per share on revenues of $8.7 billion,
implying a 13.8% drop in sales from the same quarter last year.
Shares are drifting higher in pre-market trading following the
announcement of Morgan Stanley earnings.

Tech earnings.Google
reported
earnings of $6.27 per share in the quarter ended March 31,
below analysts' consensus estimate of $6.44. Revenues also came
in light at $15.4 billion, below the consensus $15.54 billion
estimate. The search giant's cost-per-click, the
average price it charges advertisers, declined about 9%. Shares
are lower in pre-market trading, but are still a bit above
Tuesday's closing levels. IBM reported earnings per share of
$2.54, right in line with the consensus estimate, but revenues
were light at $22.5 billion, below the consensus $22.94 billion
estimate. Shares are lower in pre-market trading.

Other earnings. General Electric
reported earnings of $0.33 per share in the quarter
ended March 31, above analysts' consensus estimate
of $0.32. Revenues were $34.2 billion, below the
consensus $34.36 billion estimate and down about 2% from the same
quarter last year. PepsiCo reported earnings of $0.83 per
share, above the consensus estimate of
$0.75. Revenues were $12.6 billion, also above the consensus
$12.4 billion estimate and up 0.3% from the same quarter a year
earlier. Shares of both companies are higher in pre-market
trading.

Initial claims. Weekly U.S. jobless claims
data are due out at 8:30 AM ET. Economists predict 315,000 people
filed initial claims for unemployment insurance in the week ended
April 12, up from a post-crisis low of 300,000 in the previous
week. Continuing claims are expected to have ticked up to 2.78
million in the week ended April 5 from 2.776 million the week
before. "Today’s jobless claims release would be from the
reference week for nonfarm payrolls, so it carries slightly more
prominence than releases from other weeks," say Richard Cochinos
and Bryan Zarnett, currency strategists at Citi.

Philly Fed manufacturing. Out at 10 AM is
the Philadelphia Fed's latest monthly Business Outlook Survey.
The report's headline index is expected to advance to 10 from
last month's 9 reading, indicative of a pickup in the pace of
improvement of business conditions for regional manufacturers.
The index is a favorite of Goldman Sachs chief economist Jan
Hatzius, who says that more than any other indicator, it contains
"a statistically significant and economically meaningful
amount of information for growth."

TIPS auction. The U.S. Treasury will
auction $18 billion of 5-year Treasury Inflation-Protected
Securities at 11:30 AM. "Even with the richening in breakevens on
Wednesday, we expect the 5-year auction to receive decent
demand," say interest rate strategists at Nomura. "The concession
has been on curve, rather than outright, with 5-year inflation
still at very depressed levels versus 2-year and 10-year
inflation. Technicals are favorable given decent month-end
extension, investor sponsorship for short-end TIPS funds holding
up, and the likely emergence of central bank interest in this
paper. All told, we still see short-end (i.e., 5-year and under)
inflation exposure as one of the few attractive carry trades
remaining for the near term. If the 11:30 AM auction time (given
the shortened week in the U.S.) produces a tail, that'll be a
Dutch treat ahead of the long weekend, in our view."

Kuroda speech. Bank of Japan Governor
Haruhiko Kuroda said in a speech on Thursday that he saw no need
for additional monetary stimulus at the moment, despite the
recent sales tax hike that has raised fears of a slowdown in the
Japanese economy. "We will adjust policy when
needed while scrutinizing both upside and downside risks to the
economy and prices," he reiterated.

Japan flows. Japanese investors
purchased ¥115.5 billion of foreign bonds in
the week ended April 11 after selling ¥378.1 billion in the
previous week. They also sold ¥33.3 billion of foreign stocks
after purchasing ¥94.7 billion the week before. Investors outside
of Japan bought ¥360.3 billion of Japanese bonds after purchasing
only ¥21.9 billion in the previous week. Foreign investors also
unloaded ¥83.5 billion of Japanese stocks after buying ¥223.1
billion the week before. "After having a voracious appetite
last year for Japanese shares, foreign investor demand has cooled
considerably and thus far this year, foreign investors have been
net sellers," says Marc Chandler, global head of currency
strategy at Brown Brothers Harriman.

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